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Unemployment in South Africa: the nature of the beast

  • Geeta Kingdon

    (Centre for the Study of African Economies)

  • John Knight

    (Department of Economics,Oxford University)

Unemployment in South Africa is so widespread that it demands an explanation. This paper examines two questions about South African unemployment. Firstly, why do the unemployed not enter the informal sector, as is common in other developing countries? Secondly, why do the unemployed not enter wage employment more readily? The findings provide little support for the idea that unemployed people choose to be unemployed: the unemployed are substantially worse off, and less satisfied with their quality of life, than they would be if informally employed. Various impediments to entry into the informal sector increase open unemployment. The test of the hypothesis that the unemployed have unrealistically high wage aspirations suggests that the commonly reported high reservation wages (relative to predicted wages) are not to be interpreted as reflecting unwillingness to work.

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File URL: http://econwpa.repec.org/eps/lab/papers/0409/0409003.pdf
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Paper provided by EconWPA in its series Labor and Demography with number 0409003.

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Length: 26 pages
Date of creation: 08 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpla:0409003
Note: Type of Document - pdf; pages: 26
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Geeta Kingdon & John Knight, 2000. "Are Searching and Non-searching Unemployment Distinct States when Unemployment is High? The Case of South Africa," Economics Series Working Papers WPS/2000-02, University of Oxford, Department of Economics.
  2. Geeta G. Kingdon & John B. Knight, 1999. "Unemployment and wages in South Africa: A spatial approach," CSAE Working Paper Series 1999-12, Centre for the Study of African Economies, University of Oxford.
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  11. Osmani, S. R., 1990. "Wage determination in rural labour markets : The theory of implicit co-operation," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 3-23, November.
  12. Kingdon, Geeta Gandhi & Knight, John, 2004. "Unemployment in South Africa: The Nature of the Beast," World Development, Elsevier, vol. 32(3), pages 391-408, March.
  13. Geeta Kingdon & John Knight, 2001. "Race and the Incidence of Unemployment in South Africa," CSAE Working Paper Series 2001-18, Centre for the Study of African Economies, University of Oxford.
  14. Cross, Rodney, 1982. "How Much Voluntary Unemployment in Interwar Britain? [Searching for an Explanation of Unemployment in Interwar Britain]," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 380-85, April.
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  17. Moll, Peter, 1996. "Compulsory Centralization of Collective Bargaining in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 326-29, May.
  18. Xaba, Jantjie & Horn, Pat & Motala, Shirin & Singh, Andrea, 2002. "Informal sector in Sub-Saharan Africa," ILO Working Papers 355190, International Labour Organization.
  19. H. Bhorat, 1999. "The October Household Survey, Unemployment and the Informal Sector: A Note," South African Journal of Economics, Economic Society of South Africa, vol. 67(2), pages 143-146, 06.
  20. P.A. Black & N. Rankin, 1998. "On the Cost - Increasing Effects of the New Labour Laws in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 66(4), pages 215-220, December.
  21. Metcalf, David & Nickell, Stephen J & Floros, Nicos, 1982. "Still Searching for an Explanation of Unemployment in Interwar Britain," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 386-99, April.
  22. Vella, Frank, 1988. "Generating conditional expectations from models with selectivity bias," Economics Letters, Elsevier, vol. 28(1), pages 97-103.
  23. Maluccio, John A. & Haddad, Lawrence James & May, Julian, 1999. "Social capital and income generation in South Africa, 1993-98," FCND discussion papers 71, International Food Policy Research Institute (IFPRI).
  24. Kaplinsky, Raphael, 1995. "Capital Intensity in South African Manufacturing and Unemployment, 1972-1990," World Development, Elsevier, vol. 23(2), pages 179-192, February.
  25. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  26. Theodossiou, I., 1998. "The effects of low-pay and unemployment on psychological well-being: A logistic regression approach," Journal of Health Economics, Elsevier, vol. 17(1), pages 85-104, January.
  27. Collins, Michael, 1982. "Unemployment in Interwar Britain: Still Searching for an Explanation [Searching for an Explanation of Unemployment in Interwar Britain]," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 369-79, April.
  28. J. B. Knight, 1982. "The Nature of Unemployment in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 50(1), pages 1-7, 03.
  29. Nicoli Nattrass, 2002. "Unemployment, Employment and Labour-Force Participation in Khayelitsha/Mitchell's Plain," SALDRU/CSSR Working Papers 012, Southern Africa Labour and Development Research Unit, University of Cape Town.
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